Business Directories

US airlines inch closer to merger deal

New York, January 27, 2013

US Airways Group and American Airlines parent AMR Corporation are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, sources said.

The two airlines, as well as AMR's creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks, the sources said.

AMR's board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on tomorrow and Tuesday to discuss the latest developments in the negotiations.

AMR filed for bankruptcy in November 2011 citing high labour costs. A combination with US Airways would create the world's largest airline and help the two carriers better compete with larger rivals United Continental Holdings and Delta Air Lines.

Negotiations are continuing and could still fall apart, but progress has been made towards getting a deal done, the sources said. An alternative plan for AMR to exit bankruptcy as an independent company appears a less likely path, they added.

The airlines have a potential structure for the board of a merged company, which would consist of members from the existing boards of US Airways and AMR, and those to be designated by AMR creditors, the sources said.-Reuters